Are BRICs falling off the investment map?

The term for Brazil, Russia, India and China, where stocks gained 424 percent during the decade ended 2010, appeared in the fewest news stories last month since November 2008, according to Bloomberg. BRIC searches on Google Inc.’s website fell to a seven-year low in December, while mutual funds that invest in the biggest emerging markets had outflows in 46 of the past 47 weeks.

It looks like investors, certainly the trend-following types, have lost interest after the four economies grew at the slowest pace since 2009 and the MSCI BRIC Index trailed world markets for a third straight year.

The BRICs have “now become unfashionable,” John-Paul Smith, an emerging markets strategist at Deutsche Bank AG in London who predicted the underperformance of BRIC shares in 2011, said in a report e-mailed Jan. 24.

O’Neill disagrees. Fading interest in the countries is a contrarian indicator that may foreshadow world-beating equity returns this year as China’s economy recovers, he said.

“It’s my hunch, because of China, that the BRIC index will outperform,” Goldman Sachs’ Jim O’Neill said by phone from London.

“They trade at a significant discount, certainly to their own past,” O’Neill said. “The key part of the BRIC story, the C, which is the same size as the other three put together, seems to me to be even stronger than ever.”

Bottom Line: People aren’t talking about them as a group any more, but talking about the countries separately, as each one has a different investment climate, different issues.